Congress Center going on the market

(Crain's) -- An investment group advised by Triple Net Properties LLC is putting up for sale a 16-story office building on the edge of the West Loop that could sell for about $150 million, a relatively small gain over what they paid about five years ago.

The current marketing effort would be the third time Triple Net has tried to sell the structure since it bought the property in 2003. The price paid then was $136.1 million, real estate research firm CoStar Group Inc. says.

Congress Center is listed for sale on Triple Net's Web site, and a spokeswoman confirms it is on the market. Executives with Holliday's Chicago office decline to comment.

If Congress Center sells for $150 million, it would be only about 10% more than its price five years ago. The slow growth in value in part reflects the building's vacancy rate, which CoStar says has risen to 21.1%, compared to 9.0% during the fourth quarter of 2006.

A solid core of tenants accounts for 68% of Congress Center: North American Company for Life & Health Insurance, chemical company Azko Nobel Inc., the U.S. government and Amtrak. But those leases expire between 2011 and 2013, when several new buildings are expected to open, increasing competition for tenants.

In a difficult financing market, one possible plus for a buyer is the existing mortgage, which could be assumed as part of deal. In 2004, Triple Net obtained a loan from Bear Stearns & Co. that matures in 2014, with an annual interest rate of about 5.64%. That loan has a current balance of roughly $100 million.

The building's largest owner is the former G REIT Inc., an investment vehicle sponsored by Triple Net that is liquidating its assets. G REIT owns 30% of the building; other Triple Net entities own the rest.

Triple Net is now a subsidiary of Grubb & Ellis Co. after Triple Net's parent company, NNN Realty Advisors Inc., also of Santa Ana, acquired Grubb late last year. The combined parent company took the Grubb & Ellis name.

Congress Center isn't the only downtown tower going on the market.

Norfolk, Va., based Harbor Group International LLC has hired the Chicago office of real estate firm CB Richard Ellis Inc. to sell the landmark Burnham Center, 111 W. Washington St., sources say. Real Estate Alert, an industry newsletter, said Tuesday that the 580,000-square-foot building might sell for about $200 a square foot, or $166 million. An executive with CB Richard Ellis could not be reached for comment.